THE BUDGET DEAL: THE OVERVIEW

THE BUDGET DEAL: THE OVERVIEW; BUDGET ACCORD IS REACHED; BOTH SIDES CLAIM A VICTORY AS A SHUTDOWN IS AVERTED

By KATHARINE Q. SEELYE

Published: October 16, 1998

WASHINGTON, Oct. 15—
President Clinton and Congress reached agreement today on the final portion of the nation's $1.7-trillion budget, the first in three decades brought forth with a surplus and one that offers the biggest peacetime increase in military spending since Ronald Reagan was President in 1985.

Both sides quickly claimed victory, and complimented each other, on a compromise hammered out 19 days before Election Day that avoided a confrontational Government shutdown. Aides are to translate the agreement into legislative language overnight and both houses are expected to pass it on Friday, when many lawmakers dash home to campaign.

Today's final $500 billion piece of the package, and an accompanying change purse with $20 billion for what lawmakers called emergencies, provides for a vast array of activities, from the local to the global.

These include steps to begin hiring 100,000 elementary schoolteachers over seven years, as well as relief for farmers and a whopping $820 million increase above President Clinton's request of $1.2 billion for unspecified basic medical research at the National Institutes of Health.

It also provides money for American peacekeeping troops in Bosnia, tightening security at United States embassies around the world and shoring up the depleted reserves of the International Monetary Fund.

And it restores $35 million in food, oil and other aid sought by the Administration for North Korea in exchange for that government's limiting its nuclear weapons program.

The bill adds money for the nation to develop a plan to combat bioterrorism. And because of the killing of two Capitol Hill police officers earlier this year, it provides $200 million to develop a visitor center to more easily control entry into the Capitol and a tightening of security at the Capitol and the Library of Congress.

The package also produced new policy. Federal health plans will now be required to provide contraceptive coverage for Federal workers. But in a concession to conservatives, the handful of Government plans with religious affiliations can exempt themselves from this requirement on religious grounds. In addition, individual doctors and nurses can refuse to provide contraceptives on moral grounds.

The agreement also delayed for a year a regulation that would have distributed transplant organs on a national basis to the sickest patients, as the Administration has proposed. The decision keeps the organs under regional control.

Negotiators also agreed to sidestep a thorny problem involving back dues to the United Nations. Representative Christopher H. Smith, a New Jersey Republican who is a strong opponent of abortion, has insisted that the Government withhold its dues to the United Nations as long as it provides grants to international family planning organizations that lobby other countries to make abortion legal.

Because Mr. Clinton has threatened to veto any measure that contains the anti-abortion provision, negotiators took these two measures out of the final omnibus package and put them in a separate bill that they will send to Mr. Clinton later.

Perhaps the biggest victory went to the President, who demonstrated his power to influence Congress even as Congress considers whether to impeach him. He set the terms of the public debate on the budget, plucking it from the hearing rooms of the Capitol where it had been thrashed out in relative obscurity over the last several months and airing it in the nation's living rooms in the last week by talking about new teachers.

''Just think what we could do for America if we had these priorities all year long, instead of just for eight days,'' the President said at a news conference this afternoon.

Republicans won some issues, like more military spending and blocking the President's plan for new school construction. But they failed on their signature issue, which was a tax cut in a year with what may be a $70 billion surplus. Their biggest achievement may have been their ability to get out of town without drawing blame for disrupting the Government.

Summing up the feelings of many of his colleagues, Senator Trent Lott of Mississippi, the majority leader, said: ''I'm glad we brought it to a conclusion without an unnecessary, uncalled-for and shouldn't-have-been-threatened shutdown. We got our work done.''

Speaker Newt Gingrich, in recapping Republican victories, essentially ceded dominance to the President by hailing first the agreement to provide more than $1 billion down payment to hire 100,000 teachers -- a Clinton proposal. Republicans won the caveat that local school districts could use the money to hire special education teachers.

Republicans' biggest spending gains came in military aid, a priority highlighted by the Joint Chiefs of Staff, who recently said the country was $15 billion short on a proper level of financing. Today's agreement provides more than $9 billion, some of it classified, much of it for extra equipment.

Mr. Gingrich, who once argued in a metaphor for reduced military spending that the Pentagon should be reduced to a triangle, said today that with problems in Bosnia, Iraq and North Korea, the increase was necessary for America ''to lead the world.''